THE WEEKLY ISSUE TH APRIL 2018 A PRELIMINARY STATEMENT FOR FY2018/19 BUDGET IN THIS ISSUE

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1 A PRELIMINARY STATEMENT FOR FY2018/19 BUDGET The Egyptian government released a preliminary statement, showing the main components and targets of its budget for FY2018/19, which is currently being discussed in the parliament. EGP BN Revenues Taxes Grants Other Revenues Expenditures Wages Purchases of Goods & Services Interest Payments Subsidies & Social Benefits Other Expenditures Investments 2017/18 ESTIMATES , /19 TARGETS , % CHANGE 21.6% 23.4% -0.2% 15.8% 15.4% 10.9% 25.1% 23.6% 0.3% 15.1% 33.4% The statement mentioned that Egypt s FY2018/19 budget targets a GDP growth of 5.8%, up from 5.2% in the current fiscal year and lowering budget deficit and public debt to 8.4% and 91% of GDP. IN THIS ISSUE The new budget targets boosting tax and fiscal revenues, focusing on administrative and institutional reform, and switching to cash instead of in-kind subsidies Preliminary Statement For FY 2018/19 Budget Finance Ministry Public Banks Halt High Yield Certificates Egyptian Cabinet Establishes A Sovereign Wealth Fund The 29 th Arab League Summit Held In Saudi Arabia World Bank Provides Egypt With Five Years Fund 1

2 State-owned banks The National Egypt (NBE) and Banque Misr announced halting the issuance of their 17% yield savings certificates in light of the Central Egypt s (CBE) move to lower key interest rates following the decline in inflation rates. State-owned banks have started launching high-yield savings certificates after floating the Egyptian Pound in November 2016 to help contain the resulted inflationary pressures. The Egyptian Cabinet approved a draft law to establish a sovereign wealth fund with the aim of controlling state assets. The new fund, whose estimated capital is EGP200 billion, targets improving the management of the country s unused assets, better monitoring the performance of state-owned companies and developing the government s ability to invest in different sectors. According to the draft law, the fund will be allowed to establish sub-funds and contribute in other Arab funds. A unit has been established within the Planning Ministry to follow up and coordinate with other ministries to identify the unused assets. The fund will be managed mainly be the Planning Ministry Hala Al-Said Planning Minister Asharq Al-Awsat 12 th April 2018 The 29 th Arab League summit was held yesterday in Saudi Arabia, with participation of 16 leaders of Arab countries. This gathering was named the Quds (Jerusalem) Summit, responding to the US recent decision to recognize Jerusalem as the capital of Israel, confirming full support the Palestinians. The summit also called for an international investigation over the criminal use of chemical weapons in Syria and condemned what it saw as Iran s interference in the affairs of other countries. We need a comprehensive strategy to preserve national security in Arab countries to protect against any attack or foreign interference Egypt will not accept Yemeni elements bombing Saudi territory with ballistic missiles, as this constitutes a threat to Arab national security I still hope that some of those who insist on standing on the wrong side of history will return to the right path and completely stop sponsoring and supporting terrorism President Abdel Fattah Al-Sisi Ahram Online 15 th April

3 The World Bank announced that it is going to provide Egypt with USD500 million over five years to fund education reforms, with the aim of increasing access to quality kindergarten education in addition to developing the quality of learning and adopting technology. The project will expand access to quality kindergarten for around 500,000 children, train 500,000 teachers and education officials, while providing 1.5 million students and teachers with digital learning resources The World Bank Group Statement Ahram Online 14 th April

4 EGYPT AT GLANCE EXCHANGE RATES USD EUR STERLING POUND 16 TH APR TH APR TH MAR TH APR 17 2 ND JAN Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr STOCK MARKET 20,000 18,000 EGP per USD EGP per Euro EGP per Pound Sterling 17, TH APR TH APR TH MAR TH APR 17 2 ND JAN 18 16,000 14,000 EGX30 17,620 17,697 16,999 13,027 15,024 12,000 10,000 EGX70 EGX ,261 2,260 2,272 1,372 1,982 8,000 6,000 4,000 2,000 0 T-BILLS AUCTION CONSUMER PRICE INDEX AND MAJOR COMPONENTS AUCTION DATE MATURITY (DAYS) AVERAGE YIELD (%) WEIGHT IN BASKET % FEB 2017 FEB 2018 Y/Y 15 TH APR (INDEX) (JANUARY 2010=100) 12 TH APR HEADLINE- ALL ITEMS 100% % 15 TH APR FOOD AND BEVERAGES 39.92% % 12 TH APR TOBACCO AND RELATED PRODUCTS 2.19% % INTEREST RATES CLOTHING AND FOOTWEAR HOUSING, WATER, ELECTRICITY AND GAS 5.41% 18.37% % 10.62% OVERNIGHT DEPOSIT RATE OVERNIGHT LENDING RATE CORRIDOR RATE CURRENT 16.75% 17.75% 17.25% PREVIOUS 17.75% 18.75% 18.25% FURNISHINGS AND HOUSEHOLD EQUIPMENT MEDICAL CARE TRANSPORTATION COMMUNICATIONS 3.77% 6.33% 5.68% 3.12% % 7.59% 13.10% 10.97% GLOBAL COMMODITY PRICES RECREATION AND CULTURE EDUCATION 2.43% 4.63% % 19.58% BRENT CRUDE* GOLD** 16 TH APR 18 9 TH APR TH MAR TH APR 17 2 ND JAN , , , , ,311.8 HOTELS, CAFES AND RESTAURANTS MISCELLANEOUS GOODS AND SERVICES 4.43% 3.73% % 17.69% WHEAT*** *USD/BARELL **USD/OUNCE SOURCE: BLOOMBERG ***USD/BU

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